Risk management is something every organisation needs to be thinking about. After all, both financial and legislative risks can prove problematic when developing a business, and in some cases even impair the long-term development of the organisation.
The first step then is to understand how risks develop in the first place, moving on eventually to the implementation of appropriate and effective solutions.
An area that’s overlooked
It’s well understood that a number of areas within a business can prove risky. After all, everything from IT to customer service is ripe with the potential to upset operations. Contractors, however, may be one area that’s regularly overlooked.
Increasingly, contractors can prove a useful option for significant projects, especially at the government level. Bringing these individuals onboard often means access to a high level of talent without having to go through arduous employment processes.
This is likely due to the fact that there are so many areas where risk is liable to develop. Employment, insurance, WorkCover and operational health and safety are just a few of the areas where there’s a significant chance of issues.
Interestingly, PricewaterhouseCooper’s Annual CEO Survey noted 66 per cent of a surveyed 1,400 global CEOs believe there are more risks today than in previous years. Contractors, however, were not stated as a potential area of risk.
As a result, it’s high time organisations start taking contractor risk management seriously.
Minimising contractor risk
Taking the US as an example, Dun & Bradstreet noted in a report, Government Best Practices for Mitigating Contractor Risk, just how contractor risk has been given a serious rethink in recent years.
Following an initiative from the Obama Administration, a set of best practices emerged across both public and private sector organisations to effectively minimise contractor risk. Unsurprisingly, the organisations that saw the highest levels of success established comprehensive processes to mitigate contractor risk, validated potential contractors during the phase prior to awarding contracts and used automated reporting tools to strengthen things such as management and oversight.
Furthermore, Dun & Bradstreet explained several of these processes in more detail.
1) Contractor validation in the pre-award phase
This means evaluating the capabilities of prime contractors and as well as subcontractors. Organisations should assess whether the contractor has the resources to perform the contract and investigate their performance record.
2) Monitor contractors following the awarding of a contract
While a contractor may appear a suitable choice following the awarding of a contractor, there’s certainly a chance of them running into financial or other operational difficulties that may impair their ability to carry out the contract.
A solution with Oncore
To tackle corporate contractor risk, Oncore Services take a number of steps to resolve the issue. Firstly, Oncore manages the employment of PAYG contractors. This helps to mitigate the risks associated when organisations directly employ contractors. What’s more, Oncore provides compliant PL/PI insurance coverage and Workcover appropriate for each state and each contractor.
Finally, there’s a cross-check of agency invoices against timesheets that have been approved.
If you’re interested in learning more about minimising contractor risk, along with strategies for payroll and things like expense processing, don’t hesitate to get in touch with the Oncore Services team today to learn more. Oncore have been involved in the contractor market for over 15 years and have the knowledge needed to handle compliance and legislative queries.
Given that legislation can change in a short space of time, it’s important to stay ahead of the curve – especially to avoid the risks associated with contractor projects gone wrong.